AGENDA FOR MORNING MEETINGS

Market Report
3 December 2014
November 2014
Important events for this week:
INDEX TABLE
CBOT March Corn
CBOT March Wheat
CBOT March Soya
R/$
Brent Crude Spot
Previous day
12pm
3.9000
6.0475
10.2500
11.0229
72.38
Present
day
3.8050
5.9750
10.0075
11.1133
70.68
Change
-9.50
-7.25
-24.25
0.090
-1.70
CBOT
$/mt
149.79
219.54
367.71
SA $/mt
186.35
334.91
492.65
Implied Parity
Move
-R 27.69
-R 9.52
-R 64.98
INTERNATIONAL MARKETS
CORN/MAIZE
CBOT – March ▼8.50c/bu @ 381.25c
Overnights March ▼0.75c/bu @ 380.50c
 “Turnaround Tuesday” kicked in with vengeance last night dragging corn prices 2% lower
 Some of the pressure came from the US$ trading at 4yr highs while lower crude oil prices
added to the slide
 More pressure was felt from better weather conditions in South America while funds sold
around 8k contracts
WHEAT
CBOT – March ▼3.50c/bu @ 603.25c
Overnights March ▼5.75c/bu @ 597.50c
 US wheat prices climbed to fresh 4yr highs early in the session last night but retreated later on
 Fears that Russia could slow down exports to protect local prices together with a range of
weather fears offered support to the wheat market
 Cold spells in Russia and the US continue to worry the market while drier forecasts for
Argentina eased some concerns over quality damage. 50% of the Arg crop is now harvested
 Paris wheat futures closed higher as Europe could be the first port of call for many wheat
importers seeking an alternative to Russian supplies
 Egypt issued a tender late yesterday suggesting it is still a buyer at these high prices
SOYA COMPLEX
Soya Beans – March ▼21.00c/bu @ 1003.00c
Overnights March ▼2.00c/bu @ 1001.00c
Soya Meal - March ▼[email protected] $341.70/short ton; Soya Oil - March ▼[email protected] 31.78c/lb
 US soya prices closed below the psychological $10 level with pressure from the stronger $, a
general commodity sell-off and better South American weather
 Weather conditions in South America have improved with the planting season progressing well.
Brazil‟s expected soya crop is now 85% planted
SAFEX PREVIOUS DAY MTM
Change
(R)
Open
Interest
Yellow
Maize
Change
(R)
Open
Interest
White Maize
M-T-M
Dec WM
R 2 002
19
3 303
-382
Dec YM
R 2 035
10
1 930
Jan WM
R 2 010
18
407
4
Jan YM
R 2 036
0
4
0
Mar WM
R 2 024
21
14 032
76
Mar YM
R 2 071
17
7 141
17
May WM
R 2 044
20
261
6
May YM
R 2 047
-4
211
1
Jul WM
R 2 028
5
3 861
-12
Jul YM
R 2 052
3
3 797
45
Sep WM
R 2 046
0
148
0
Sep YM
R 2 082
5
99
0
Corn in
Rands
M-T-M
Change
(R)
Open
Interest
Change
(R)
Open
Interest
Change
Mar Crn
R 1 718
14
1 194
115
Dec Wht
R 3 722
26
4 545
-327
Jul Crn
R 1 817
8
314
0
Jan Wht
R0
0
-
0
Mar Wht
R 3 811
25
13 772
245
May Wht
R 3 850
23
1 180
1
Jul Wht
R 3 870
21
742
47
Sep Wht
R 3 843
7
240
0
Change
(R)
Open
Interest
Change
-33
Change
Change
Wheat
M-T-M
M-T-M
Change
-365
Change
(R)
Open
Interest
R 4 761
111
1 079
-91
Dec Soya
R 5 475
5
1 490
R 4 771
61
102
4
Jan Soya
R 5 447
37
129
Mar Suns
R 4 780
60
1 787
278
Mar Soya
R 5 260
40
4 612
70
May Suns
R 4 420
90
857
-5
May Soya
R 4 840
25
2 361
-7
Jul Suns
R 4 475
0
19
0
Jul Soya
R0
0
-
0
R0
0
-
0
Sep Soya
R 4 970
0
143
0
Sunflower
M-T-M
Dec Suns
Jan Suns
Sep Suns
Change
Soya
M-T-M
0
Maize prices, especially the whites, found strong support yesterday from end user and technical
buying and a slowdown in farmer selling.
COMMENTARY
Rand: The rand weakened yesterday as a thin domestic data calendar caused dealers to look
offshore for direction.
Domestically the rand is dogged by electricity supply constraints, with power utility Eskom
implementing rolling blackouts at the weekend, and persistent shortfalls on its budget and current
accounts.
The Reserve Bank (SARB) said on Monday imbalances in the economy had grown "more
uncomfortable", with financial conditions becoming less hospitable for countries with large
financing requirements.
"The rand's vulnerability stems from the large current account deficit," Carmen Nel at Rand
Merchant Bank said in a market note.
"The SARB's Monetary Policy Review noted this and indicated that the bank expects on going
rand volatility and a weakening bias. Yet normalisation is expected to be very gradual, leaving the
unit susceptible if the Fed were to embark on earlier tightening."
Weekly SA maize exports:
Exports and Imports for the week ended 28 Nov '14
Countries
WM
YM
Total
Exports
Botswana
2 891
548
3 439
Japan
0
Rep. of Korea
0
Lesotho
1 383
1 383
Mozambique
1 379
584
1 963
Namibia
2 015
405
2 420
Swaziland
984
1 597
2 581
Taiwan
Zimbabwe
1 584
1 584
Total
Imports
Ukraine
Russia
10 236
3 134
13 370
-
-
-
-
-
-
Total
Total Exports and Imports from 26 Apr to 28 Nov '14
WM
YM
Total
316 800
1 344 264
1 661 064
Exports
Imports
Maize Exports per Country - 26 Apr to 28 Nov '14
To
Angola
WM
YM
TOTAL
0
1 011
1 011
Botswana
95 103
17 078
112 181
Cameroon
0
3 540
3 540
Italy
0
50 078
50 078
Japan
0
198 197
198 197
Korea
2 188
214 474
216 662
Lesotho
76 076
7 248
83 324
Mozambique
53 313
15 177
68 490
Namibia
20 974
22 169
43 143
Portugal
0
52 499
52 499
Saudi Arabia
0
55 959
55 959
Swaziland
Taiwan
Zimbabwe
Total
13 601
24 132
37 733
0
679 185
679 185
55 545
3 517
59 062
316 800
1 344 264
1 661 064
Zimbabwe: (The Herald - 2nd December) The Grain Marketing Board imported over 52kmt of
GMO+ maize recently from South Africa at a cost of $180/mt that it sold to millers at a whopping
$390/mt, realizing astronomical profits that sources close to developments say point to more than
individual enrichment.
The deal involved a neatly woven cartel involving GMB boss Mr. Albert Mandizha and Vice
President Joice Mujuru's confidant and close ally, Agriculture, Mechanisation and Irrigation
Development Secretary Mr. Ringson Chitsiko among other officials, sources revealed yesterday.
"The quantum of funds involved here is worrying and are beyond individual enrichment.
"They point to a bigger fundraising plan. It is indeed that Zimbabwe's staple food management
machinery is being managed by self-serving individuals at the expense of national food security,"
read documents in The Herald's possession.
The GMO+ grain imports were done in defiance of a Government ban on such imports.
Mr. Chitsiko on 30th April this year, conveniently announced a national ban on maize imports citing
pending local maize harvest, soon after harvesting his own crop.
However, the imported GMO+ maize found its way into milling companies like National Foods as
late as 30th November, which in turn processed and resold it to food processing companies and
unsuspecting customers.
Ousted Mashonaland East chairman Cde Ray Kaukonde, has a huge stake in National Foods, and
has been a conduit of funds into VP Mujuru's political activities. Nestle Zimbabwe is reported to
have had one of its cereal products test positive for GMOs, culminating in a row with National
Foods, sources say.
It has also emerged that GMB board appointed by Zanu-PF's suspended spokesperson Cde
Rugare Gumbo when he was Agriculture Minister, bought maize from farmers at $375, but later
sold it at $150/mt on the pretext it had declined in quality due to poor storage facilities.
The profits accruing from the maize are believed to have been used to fund factional activities.
The government suffered serious loss after it had advanced to GMB $34 million for the purchase
of the 90kmt, but realised $13,5 million. This translated to a $20,5 million loss.
Rugare Gumbo, who has since been suspended from party activities for five years, was one of the
ring leaders of the Mujuru cabal and he could have used his influence as minister on the GMB
board to engage in the illegal activities to fund the disgraced VP's ambitions. This was a scandal of
major proportions which had a serious impact on the lives of ordinary Zimbabweans, it is alleged.
"The emergence of statistics indicating that 52kmt of GMO+ maize were imported during the
harvesting time in Zimbabwe is, to say the least, a scandal," reads the document. "The population
of Zimbabwe was subjected to GMO+ maize unknowingly believing that the maize was made from
local organic maize.
"The intention to issue permits by Mr. Chitsiko (VP Mujuru's confidante) during the night smacks of
corruption and nepotism. GMO+ maize is landing at circa $180/mt and it prejudiced local farmers
who were asking for higher price... Chitsiko is believed to have received tremendous farming
inputs from beneficiaries of these permits for 2014/5 worth more than $300 000."
Mr. Chitsiko was involved in the deals without the knowledge of, Agriculture, Mechanisation and
Irrigation Development Minister Dr Joseph Made. "The controversial Statutory Instrument, which
was even condemned by the deputy Attorney General Advocate Machaya in his legal opinion to
Chitsiko, fixing maize prices, was gazetted by Chitsiko a week soon after he harvested his own
maize," reads the document.
"Chitsiko did this without the knowledge and consent of Minister of Agriculture. To date, Minister
Made has never issued a statement supporting it."
Queries are being raised why management at GMB received and stored maize in non-functioning
storage facilities, if it was not a deliberate move to condemn the maize and sell it at lower prices to
carefully selected millers which were in line with the regime change agenda.
"Were they aware of the problem and proceeded to reconcile with the ensuing result that maize
was going to degrade? On the other hand, whilst there may have been some maize affected in
storage, the occurrence was also abused by GMB management to also sell some good maize at
low prices and shared the spoils with the buyers. A number of key staff was mysteriously
dismissed because they knew too much," reads the document.
Mr. Chitsiko was evasive when contacted over the matter yesterday. "I am in Rome, Italy, you may
talk to the acting permanent secretary," he said. Even when it was clarified to him that the story
essentially pertained to him, he still refused to comment.
In 2011, VP Mujuru directed Mr. Chitsiko to issue her family business with a permit to import
chickens from Brazil despite a Government ban on such imports, and is embroiled in a $4million
scandal after evading customs duty for one of her consignments.
Grain Millers Association of Zimbabwe chairman Mr. Tafadzwa Musarara, yesterday said it was
important to level the playing field and affect the maize import ban on everyone.
Another player in the industry Mr. Codram Cloete, said information from the South African Grain
Information Services (SAGIS) website confirmed that Zimbabwe imported maize despite the ban.
"If you go on internet and look at SAGIS, maize was imported from South Africa to Zimbabwe. I
think there is need to be a level playing field. It (permit) cannot be given to some players and not
to others," said Mr. Cloete. He confirmed that he once demanded an explanation from Mr. Chitsiko
over the disparity.
Former Nestle Zimbabwe managing director Mr. Kumbirai Katsande, whose company used to buy
its maize from National Foods, refused to comment over the matter, saying he left the company in
September. Efforts to get comment from National foods operations executive Chipo Nheta were
unsuccessful. Sources, however, said yesterday that some products that were procured by Nestle
Zimbabwe from National Foods were tested and proved to contain GMOs and were rejected.
P
WEATHER
SA:
El Nino update - Issued on 2 December 2014:
Many climate indicators remain close to El Niño thresholds, with climate model outlooks
suggesting further intensification of conditions remains likely. The Bureau‟s ENSO Tracker status
is currently at ALERT, indicating at least a 70% chance that El Niño will be declared in the coming
months. Whether or not an El Niño fully develops, a number of El Niño-like impacts have already
emerged.
Several ENSO indicators are currently close to, or exceed, El Niño thresholds. These include
tropical Pacific Ocean temperatures, which have now exceeded El Niño levels for a month, and
the Southern Oscillation Index, which has remained at or near El Niño levels for three months.
Other indicators, such as tropical cloud, trade winds and rainfall patterns, have either remained
near average or only temporarily approached thresholds. This indicates a typical El Niño ocean–
atmosphere interaction may not be fully locked in.
The majority of international climate models surveyed by the Bureau suggest further warming of
the tropical Pacific Ocean is likely, so it also remains possible that the ocean and atmosphere will
fully couple in the coming weeks to months. If an El Niño is established, models suggest it will be
weak, or moderate at most. Regardless of whether an El Niño is declared, El Niño-like effects are
likely, as shown by the Bureau‟s December–February Climate Outlook, which shows a drier and
warmer summer is likely for many parts of Australia. Some El Niño-like impacts have already been
seen this spring in Australia and several regions around the globe, including Asia, South America
and southern Africa.
Sakkie Nigrini – Netfor: Die bolug versteuring / koue front oor Madagaskar hou vir die oomblik die
reën weg oor Gauteng en die noordelike dele van die land. Die band I.T.K.S vog lê van noord na
suid oor die Vrystaat asook die oostelike dele van die Noord-Kaap en strek tot oor die Oos-Kaap.
Die groen binne die blou sê vir my (sien Oos-Kaap) dat daar nog storms en buie voorkom maar of
my reënmeters werk nie of daar val nie regtig baie reën nie. „n Stasie naby 3 Susters het net oor
die 5mm gekry, PE sowat 6mm en „n mm of twee oor die Oos-Londen gebied. Sien die donkerblou
sirkels, dit is die dele waar daar tans „n bietjie aktiewe weer is en ook die dele wat waarskynlik
weer donderweer of buie kan kry later vanmiddag. Die groen dele is waar daar voldoende vog is
vir ten minste enkele donderstorms en met baie geluk aan jou kant, kan daar een of twee
donderbuie ontwikkel in die geel strook(tussen groen en geel) Ek dink egter die verspreiding sal
minder as 20% wees, dus sal dit nie in my algemene voorspelling aangedui wees as „n reënkans
nie. Die blou omkringde gebied oor die suid-kus (Kaap) is betrokke en koel met kolle ligte reën,
maak dit reën want George staan ook net oor die 5mm, dan is dit reën en nie motreën nie. Sal
soos altyd weer vanmiddag kyk wat waar gebeur en opdateer!!
International:
US: The DTN Ag weather forecast calls for drier and milder conditions in the Midwest to offer
some chances for post-harvest fieldwork and late-harvest progress. There are no significant winter
storms to affect transportation during the next week. However, some wet episodes may occur
through southeast and far south areas and in the Delta region.
South America: In central Brazil, soybeans should benefit from periods of scattered showers and
near- to above-normal temperatures during the next week to 10 days. Scattered thundershowers
will move across southern Brazil Tuesday and Wednesday. This will maintain mostly favourable
conditions for developing corn and soybeans.
In central Argentina, a drier pattern is in effect for most of this week following heavy rains during
the past weekend. This will allow for some fieldwork and planting progress. A new cold front
threatens heavy rain and potential severe weather during the coming weekend.
Black Sea: Following light weekend precipitation in south eastern Ukraine and south Russia, very
little additional moisture is expected during this week. The pattern will continue to be watched
closely due to a below-normal precipitation trend prior to wheat going into its dormant phase.
PIVOT POINTS
Intraday Pivot Points
Second Resistance
First Resistance
Pivot
First Support
Second Support
Mar WM
2037
2031
2021
2015
2005
Mar YM
2083
2078
2071
2066
2059
Mar
Corn
1730
1725
1714
1709
1699
Mar
Wheat
3837
3821
3809
3793
3781
Mar
Suns
4899
4844
4764
4709
4629
Mar Soya
5295
5270
5235
5210
5175
CONTACT DETAILS
POINTS
Pretoria
274 Emus Erasmus Ave
Erasmusrand
Pretoria
012 940 8347
John
012 940 8349
cell: 082 456 7434
[email protected]
Juanita
Tel: 012 940 8348
cell: 084 824 0902
[email protected]
P.O. Box 25082
Monument Park, 0105
The information contained in this report has been taken from trade and statistical services and other sources which we believe are reliable. Agcom
(Pty) Ltd does not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect
judgments at this date and are subject to change without notice. Readers are urged to exercise their own judgment in trading. Any reproduction or
retransmission of this report without the express written consent of Agcom (Pty) Ltd is strictly prohibited.
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